Josh Wright, Antitrust Superstar

Chairman Deborah Platt Majoras today announced the appointment of Professor Joshua Wright to the newly created position of Scholar-In-Residence in the Bureau of Competition of the Federal Trade Commission. With this new position, the Commission will invite an academic expert on the law and economics of antitrust to join the Commission to work closely with the Bureau of Competitionâ€™s investigative and policy staffs. The program will help ensure that the Commission has the benefit of the latest and best thinking on competition issues as it undertakes its enforcement agenda.

This is a great honor for Josh and a powerful affirmation of the exceptional quality of his scholarship.Â Moreover, it can only be good for the rest of us:Â Josh is the youthful embodiment of the UCLA School (e.g., Armen Alchian, Harold Demsetz and Ben Klein (also collectively known as Josh’s dissertation committee)), a school of thought whose continued influence in antitrust policyÂ brings both incomparable analysis andÂ much-needed humilityÂ to bear on the regulatory enterprise.

13 responses to Josh Wright, Antitrust Superstar

I don’t know enough about the facts to comment on the economic substance of the Blockbuster merger. But it was my understanding that the deal fell through largely because Blockbuster withheld and possibly manipulated data provided to the government. I don’t think that’s a bad rule — lie to the government, your deal fails.

I’m not “against merger enforcement.” I just think the agencies have been too aggressive in blocking mergers (or effectively blocking them — e.g., Blockbuster and Hollywood Video).

As for tacit collusion, I’d point you to the 2001 edition of Posner’s Antitrust Law. He provides a laundry list of factors that could indicate that such collusion is occurring. I’ll concede that his proposal creates administrative difficulties. My point, though, was simply that many of us accused of being excessively deregulatory are actually fairly aggressive when if comes to collusive behavior.

(By the way–I don’t purport to speak for Josh. I have no idea what he thinks about any of this.)

I should add that: (1) there isn’t much legal precedent to attack tacit collusion (where’s the agreement), (2) it’s difficult, if not impossible to prove, and (3) even if you could prove it, try getting the average trial judge to actually understand the basic game theory scenario.

Lambert — how can you be in favor of going after tacit collusion, but against merger enforcement. Isn’t the whole point of merger enforcement to prevent the types of market structures that lead to tacit collusion in the first place? Why not just spend those resources on the front end, when the government actually has some bargaining power?

Besides, if you believe in markets, wouldn’t you believe that an unstable equilibrium like that would eventually break down on its own accord, without gov’t influence?

Congrats, Josh! This is great news — for you personally, for TOTM, and for all of us who are affected by what the FTC does (and that’s pretty much everybody).

I’ll let you respond to Mr. (or Ms.) Market Failure. I get that sort of attack all the time: “Lambert, you’re skeptical of monopolization claims and merger challenges, so you must be reflexively deregulatory.” Not at all. While my general view is that there’s too much antitrust intervention when it comes to single-firm conduct and mergers, I think we could actually be a bit more aggressive in policing tacit collusion. There are lots of other Chicago School folks who think the same way (Judge Posner comes to mind). Sadly, though, we’re always portrayed as being knee-jerk deregulators. Perhaps that’s because we start with the assumption that the market works pretty well and ought to be left alone unless we’re confident that intervention could make the world a better place.

What a surprise. Some stiff with ties to George Mason lands a cushy sinecure with the FTC. Advocating complete deregulation of everything is not “economics.” I suggest his first recomendation be abolishing his own position, which in fact, would be the FTC’s best decision since . . . well, ever.

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